UK: Agency Workers Regulations Guidance Now Available

The long awaited draft guidance on the Agency Workers
Regulations 2010 is now available. BIS will consider any comments
by 15 April before finalising the guidance which is due to be
published in final form at the end of April.

The guidance covers:

the scope of the Regulations

qualifying for equal treatment

pay

working time and holiday entitlement

pregnant workers and new mothers

pay between assignments

how to identify basic working and employment conditions

information, liability and remedies

The guidance is presented in an easy to read style. Some of the
more challenging questions have not been addressed and will be left
for tribunals and courts to tackle. With the draft guidance now
available, hirers and temporary work agencies will be well advised
to consider how the Agency Workers Regulations affect them, and
take steps now to assess risk, make modifications to existing
practices and otherwise ensure compliance in time for the 1 October
2011 implementation date.

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below:

Full Article

The long awaited draft guidance on the Agency Workers
Regulations 2010 is now available. BIS will consider any comments
made by 15 April before finalising the guidance which is due to be
published in final form at the end of April.

The guidance covers:

the scope of the Regulations

qualifying for equal treatment

pay

working time and holiday entitlement

pregnant workers and new mothers

pay between assignments

how to identify basic working and employment conditions

information, liability and remedies

The guidance is presented in an easy to read style. Some of the
more challenging questions have not been addressed and will be left
for tribunals and courts to tackle. With the draft guidance now
available, hirers and temporary work agencies will be well advised
to consider how the Agency Workers Regulations affect them, and
take steps now to assess risk, make modifications to existing
practices and otherwise ensure compliance in time for the 1 October
2011 implementation date.

The law changes on 1 October 2011 when the Agency Workers
Regulations 2010 (the "Regulations") come into force.
Agency workers will then qualify for equal treatment after 12 weeks
in the same role with the same hirer regardless of whether they
have been supplied by more than one agency for part of that period
of time. Agency workers are also to be entitled to access to
facilities and information on job vacancies from day 1 of their
assignment.

Who is an agency worker?

The guidance attempts to deal with the scope of the Regulations
by giving examples of those who are likely to be "outside the
scope" or "in scope" of the Regulations. The
examples indicate that most agency workers will be employees of the
agency although some may simply have a contract with the agency and
work under the direction and supervision of a manager within the
hirer. Individuals on secondment or loan from one
organisation to another, who are provided as part of a managed
service contract, or those who are genuinely in business on their
own account will be outside the scope.

Access to workplace facilities

The guidance gives examples of the sort of facilities which an
agency worker may be entitled to access from day 1. These include
canteen, crèche, staff common room, mother and baby room,
prayer room, food and drinks machines and car parking. Agency
workers are not entitled to "enhanced" rights and so if
there are waiting lists for places (for example in the
crèche) the agency worker would be able to join the list but
not have priority treatment. The guidance recognises that agency
workers may be treated less favourably in relation to facilities
and amenities provided by the hirer if there is objective
justification, in which case it will be for the hirer to show that
the treatment in question is appropriate and necessary to achieve a
legitimate aim.

Access to information about job vacancies

The Regulations provide that agency workers (from day 1) will be
entitled to information about job vacancies within the hirer but,
unlike the Temporary Agency Workers Directive, this is restricted
only to those vacancies that would be available to a comparable
employee/worker of the hirer. The guidance gives information
as to who will be comparable for this purpose (generally, a current
worker who is engaged at the same establishment and engaged in the
same/ broadly similar work). Interestingly, the guidance also
states that this obligation does not constrain a hirer in how they
treat applications, or indeed from imposing qualification or
experience requirements such that only an existing employee/worker
of the hirer could comply. It is therefore questionable how
much benefit this right will be to agency workers unless hirers
take a positive approach towards it.

The 12 week qualifying period

The guidance makes clear the Regulations are not retrospective.
Therefore for those agency workers already on assignment the
qualifying period starts on 1 October. After 12 weeks in a given
job an agency worker will be entitled to the same terms and
conditions relating to the duration of working time, night work,
rest periods ands rest breaks, annual leave and to be paid at the
appropriate overtime rate as he or she would have received as a
direct employee.

Many questions have been asked as to what events will break or
pause continuity. The guidance provides some
clarification:

The qualifying period will restart when an agency worker moves
to a new hirer. New hirers are different legal entities. Where a
hirer has multiple sites merely moving an agency worker from one
site to another will not break continuity.

The time that counts towards the qualifying period will be
broken if there is a substantive change to a job role within the
same hirer. The guidance confirms that the whole or main role must
be substantively different and there has to be a genuine and real
difference to the role. The key factors that will determine whether
a job is substantively different relate to changes in the skill set
required to carry out a job and in the nature of the work and
duties carried out. In the event of a dispute a combination of
factors can be expected to be taken into account by a tribunal when
establishing whether or not a role is substantively different, such
as different skills and attributes, a new level of responsibility,
a different line manager, a change of organisational unit or
location, a change in working hours and pay rate.

Most absences (e.g. sickness) will pause the clock for service
accrual purposes, but pregnancy and maternity, paternity or
adoption related absences keep the clock ticking.

Pay

The guidance makes it clear that pay is defined as basic pay
plus other contractual entitlements that are directly linked to the
work done by the agency worker whilst on the assignment, i.e.
"pay for work done". The guidance covers the possibility
of payment in lieu for untaken holiday (over and above statutory
leave).

Bonuses are a tricky area and the key question when deciding
whether an agency worker qualifies for a bonus is whether it is
directly attributable to the work which that worker has done. If a
bonus is subject to an eligibility period of service then the
agency worker is required to have the same period of service dating
from the start of the assignment (not the end of the 12 week
period). As assessing the amount of a bonus can depend on the
performance of the worker the guidance covers performance appraisal
systems. It states that although an agency worker may be entitled
to the bonus that he or she would have been entitled to if hired
direct to do the same job this does not mean that the same process
for assessing performance need be followed. It may be appropriate
for the hirer to modify the assessment process and to conduct
shorter appraisals for agency workers. It also reassures employers
that should a hirer choose to address this requirement of the
Regulations by integrating an agency worker into an existing
performance appraisal system this need not affect the worker's
employment status.

The Regulations include an exemption from equal treatment
provisions on pay where an agency can offer an agency worker a
permanent contract of employment and pay the agency worker between
assignments (i.e. during the periods when they are not working when
there are no available suitable assignments for the agency worker).
The minimum amount of pay between assignments must be at least 50%
of the worker's basic pay while on assignment and not less than
the national minimum wage. The exemption means that after 12 weeks
in a given job the agency worker will not be entitled to the same
pay as if they had been recruited directly. The guidance warns that
this derogation as to pay is only in the context of a worker who
has the comfort of employed status and enjoys the certainty of a
fair level of pay where there is genuinely no assignment available.
Any approach to deny workers their rights may lead to claims and
one or more of the remedies available under the Regulations.

Working and employment conditions

The guidance on how to identify basic working and employment
conditions is intended to identify the correct terms and conditions
which apply. The requirement is to treat the worker as if he or she
has been recruited directly to the same job as a comparable
employee. If there is no comparable employee then the basic working
and employment conditions are those which "apply
generally" in the workplace. The guidance refers to terms and
conditions, for example those set out in a company handbook or
similar without fully elaborating on what "basic" really
means. We expect this to be a source of future litigation,
although the guidance points out that many claims will be low value
and encourages settlement outwith the tribunal process.

Pregnant workers and new mothers

Paid (by the agency) antenatal appointments are a new right for
pregnant agency workers, but of greater financial impact for the
agency is the fact that, in cases where a hirer (who will be
obliged to risk assess for the pregnant worker) cannot make
reasonable adjustments to remove risks identified, the agency will
be obliged to try and find suitable alternative work for the worker
(at the same or better rate) failing which she will be entitled to
be paid by the agency for the duration (or likely duration if not
known) of the terminated assignment. This highlights one of
the commercial impacts of the Regulations as between agencies and
hirers, given that in many cases agencies are likely to try and
build in protection against such costs to their terms with a
hirer.

Enforcement and liability

The information requests, liability and remedies section makes
it clear how much information must be supplied to the various
parties and the time limits which apply. Agency workers can bring
claims in employment tribunals and can be compensated for any loss
of earnings related to their entitlements under the Regulations, or
receive an appropriate level of compensation for example if they
have been denied access to a facility. There is no maximum award
but there is a minimum award of two weeks' pay regardless of
any loss suffered unless the employment tribunal finds that the
agency worker behaved unreasonably and the employment tribunal has
the power to reduce the award if it is just and equitable. The
Regulations contain anti avoidance provisions designed to prevent
the structure of assignments that are put in place to intentionally
circumvent the Regulations. Here the remedy is an additional amount
up to £5000 made against the hirer or agency or split between
the parties in a way the tribunal considers just and equitable. The
agency worker must have completed at least two assignments or two
roles in substantively different roles which break the qualifying
period with the same hirer or connected hirers within the same
group in order for the anti avoidance provisions to become
relevant. Even then the tribunal will have to decide whether the
pattern of assignments indicated an intention to deprive the worker
of his or her rights.

Taking account of agency workers

The guidance concludes by covering the additional administrative
procedures that may be necessary to ensure that agency workers are
taken into account for calculating thresholds for the establishment
of information and consultation forums (under the Information and
Consultation of Employees Regulations 2004) and in other
situations, for example the information to be supplied in a TUPE
transfer will have to include suitable information relating to the
use of agency workers.

There is action that can be taken to mitigate the impact of the
Regulations on business, and hirers and agencies who have not
already done so should act quickly to prepare for their
implementation.

This article was written for Law-Now, CMS Cameron
McKenna's free online information service. To register for
Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance
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articles are not necessarily comprehensive and do not purport to
give professional or legal advice. All Law-Now information relates
to circumstances prevailing at the date of its original publication
and may not have been updated to reflect subsequent
developments.

The original publication date for this article was
06/04/2011.

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